I agree the financial impact will be insignificant in the big picture.

But I am slightly troubled by the potential impact on the sentiment of Apple consumers and investors. Most consumers don’t know that Apple really squeezes its suppliers and partners. They just believe the products are magical and reasonably priced. I’ve read the DOJ complaint. I don’t like how it sheds light on upper management’s internal thoughts, communications and strategies. I think the complaint tells a compelling story of Apple arguably manipulating the e-book market to its will. I don’t know if there are any actual antitrust violations. But we know how stories about how Apple operates tend to proliferate. If more dirt comes out during protracted litigation, negative perceptions may snowball. I think Apple has done a great job of dealing with the Foxconn issues so far. But I don’t want to see the company distracted by one perception crisis after another.

I agree the financial impact will be insignificant in the big picture.

But I am slightly troubled by the potential impact on the sentiment of Apple consumers and investors. Most consumers don’t know that Apple really squeezes its suppliers and partners. They just believe the products are magical and reasonably priced. I’ve read the DOJ complaint. I don’t like how it sheds light on upper management’s internal thoughts, communications and strategies. I think the complaint tells a compelling story of Apple arguably manipulating the e-book market to its will. I don’t know if there are any actual antitrust violations. But we know how stories about how Apple operates tend to proliferate. If more dirt comes out during protracted litigation, negative perceptions may snowball. I think Apple has done a great job of dealing with the Foxconn issues so far. But I don’t want to see the company distracted by one perception crisis after another.

The way I see it is that Amazon was squeezing publishers and building a distribution monopoly and a book buyer monopsony which is not very good for competition.

If Apple loses, there’s very little revenue at stake today. But Apple can immediately say to the publishers: sorry but the government says you are history. Opening the way to dealing direct with authors, App store fashion.

I am confident Apple has a plan, whatever the outcome of the legal case.

As regards Apple throwing its weight about, usually it’s (a) true but (b) actually to the benefit of the endpoints of the supply chain - i.e. the individual reader, and the individual writer. Apple usually forces participants on both sides to a place they don’t like, but ends up with a new, better total situation. iPhone is the big example.

I don’t know if there are any actual antitrust violations. But we know how stories about how Apple operates tend to proliferate. If more dirt comes out during protracted litigation, negative perceptions may snowball. I think Apple has done a great job of dealing with the Foxconn issues so far. But I don’t want to see the company distracted by one perception crisis after another.

You described it better than I did, but this is exactly my concern. I hate to see too many PR issues too quickly… Foxconn, the Flashback malware (albeit minor), and an antitrust case…

But then I remember people claiming AAPL would be doomed when Steve Jobs retires or dies. But when it actually happened it didn’t even cause a blip on the charts. I like to think if Apple can weather the loss of Steve Jobs that well, they can handle just about anything. Whatever penalty they could face would be a drop in the bucket, so if I were Tim Cook I’d just settle, pay it, and move on for the sake of PR.

“The settlement also prevents the companies from divulging secret information about competitors to other companies, in line with a charge that the publishers illegally revealed Amazon?s eBook retailing practices to Apple.”

Is it just me or does that sound like the government is forcing the companies to cave to Amazon?

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“The settlement also prevents the companies from divulging secret information about competitors to other companies, in line with a charge that the publishers illegally revealed Amazon?s eBook retailing practices to Apple.”

Is it just me or does that sound like the government is forcing the companies to cave to Amazon?

Yes, it does. Contracting for best price is not an unusual, or illegal, practice. The DOJ is treating that practice as if it were harmful to the customer.

The other aspect of the charges is that the publishers have colluded to “fix” pricing. I don’t see how this involves Apple legally. Apple just buys the product, with resale value determined by the publishers.

Bottom line: if the ‘agency’ model is found to be unfair to consumers, then Apple will still get best price for the product, and sell it with a GM of 30%. Before Apple got serious about digital books Amazon was getting 50% GM on the books it sold.

Personally, I see this action as the DOJ forcing Apple to undercut Amazon’s historic pricing. Apple cannot be accused of using its monopoly status with iPods and iPads to undercut Amazon, when DOJ action forces Apple to use Amazon’s business model (just not it’s margins).

This is a stupid, poorly thought out suit. Everyone is going to loser, except Apple and the consumer.

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You can’t do more, make more, be more, than the next guy, if you think like the next guy. Think different.

I am still convinced that SJ and Apple worked out what’s needed for a new digital economy to work, involving everyone who wants to take part, and Apple only makes moves towards that future. So in ebooks Apple will end up proven right too, despite a great deal of very negative commentary for a year or three. Just like Apple’s “impossible arrogance” over music, and over iPhone carrier contracts.

I am still convinced that SJ and Apple worked out what’s needed for a new digital economy to work, involving everyone who wants to take part, and Apple only makes moves towards that future. So in ebooks Apple will end up proven right too, despite a great deal of very negative commentary for a year or three. Just like Apple’s “impossible arrogance” over music, and over iPhone carrier contracts.

This is true. It seems for their online stores, so far Apple’s way has panned out pretty well across the board with very little deviation from the original plan. The most notable changes I can think of are in fact victories for the consumer, and probably what Apple wanted all along—removing DRM from iTunes music, and allowing you to re-download purchased media. Once the train leaves the station, Apple generally doesn’t end up needing to make any concessions. Which just confirms that they had a solid plan from the start.